Reflecting on the Value of Socially Responsible Practices Post Takeover of Cadbury’s Plc by Kraft Foods Inc: Implications for the Revision of the EU Takeover Directive
European Company Law, Kluwer Law International, Special Issue on CSR and SRI, 2012, Volume 9, Issue 2, pp 70-80
12 Pages Posted: 13 Jun 2012 Last revised: 7 Nov 2012
Date Written: June 13, 2012
The takeover of Cadbury’s plc by US multinational Kraft in 2010 led to the questioning of the UK’s open market for corporate control and brought stakeholders’ interests, corporations’ long-term growth and CSR practices in the spotlight. Reference to the Cadbury’s takeover as a paradigm will suggest that the reform of the UK Takeover Rules in 2011 in favor of a more long-term stakeholder interpretation of the rules is likely to have an impact on the potential revision of the equivalent EU Rules in time to come. The article begins by analyzing the European Commission’s 2011 definition of the term CSR. Following, it outlines the stakeholder focused provisions found in the EU Takeover Directive and identifies ambiguous concepts, as well as legal gaps in relation to protecting corporate interests, including those of stakeholders’. The article identifies factors, such as non-available information on CSR in the share price and directors’ corporate strategies guided by stockholders short-term interests, that impact negatively on the desired symbiosis of takeovers and CSR. Along these lines and in considering the need for legal certainty and the need to address market failures, a ‘stakeholder friendly’ reform of the Directive’s provisions is proposed. The final part of the paper proposes specific amendments to the EU Takeover Directive and takes into account data from a preliminary brief overview of ‘The Study’ on the application of the EU Takeover Directive presented by Marcuus Partners in 09.11 and from the Freshfields Bruckhaus Deringer Expert Survey Report on the ‘Reform of EU Takeover Directive and of German Takeover Law’, dated 11.11.
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